Community Buyouts For ABC Learning Centres?

With the insolvency of ABC Learning Centres – meaning that most of its child care centres are soon going to be looking for buyers – instead of management buyouts as The Age is suggesting, Alan Greig of The Mercury Centre says why not ‘community buyouts’, an equally plausible and financially possible option if the scale of support is there.

Back in June 2006 PWF made the following points in Child Care, Home Care & Community Buyouts. It all seems very relevant today:

1. Child Care

• The Federal Budget put a huge injection of ‘purchasing power’ into the child care market
• The ‘one size fits all’ policy concerns parents
• Dominant industry players (mainly large listed companies) are taking up the growth in this industry at the expense of smaller private, not-for-profit and co-op players (Sydney Morning Herald 11 April 2006)
• In at least one instance, parents are looking at a community buyout to buy back their child care centre, recently taken over by a large company. They plan to run it as a cooperative
• The child care industry is seeing many new cooperatives in other countries – but not here. Read more about cooperative childcare in the UK

2. Home Care/Community Care

• This growing industry has a large number of NonProfit and smaller private companies operating within it
• A large US company plans to set up 70 to 90 franchises over the next six years (Giant US care franchise will visit Gran for $60, SMH, 4 May 06)
• In Europe, the UK, even the US, the community care/home care industry has been one where cooperatives flourish – using overseas indicators it is a market ripe for cooperative development here

3. Employee and Community Buyouts

• Two of the fastest growing areas for new cooperative enterprise throughout the world are community purchases of essential services from private owners and employees buying out their current employer
• In Australia, professional business and financial advisers are generally unaware of the cooperative options available and are not advising on alternatives to business sale or closure
• The Australian Employee Ownership Association and the Mercury Centre, a nonprofit cooperative, can provide more information on the options for buyouts

Thanks for your alert Alan